Global Daily Tax News, Taiwan Notes Entry Into Force Of New Singapore DTA, (Jun 10, 2026)

Taiwan's tax agency has noted the upcoming entry into effect of a new double tax agreement signed last year with Singapore.

The tax agency confirmed that the agreement entered into force on February 13, 2026, following the completion of both territories' respective domestic ratification procedures. The agreement will become effective from January 1, 2027.

The new agreement reduces the withholding tax rate that may be charged at source for dividends and royalties income to 10 percent, replacing original rates of 40 percent and 15 percent, respectively, in their DTA dating back to 1982.

The new treaty generally caps withholding tax that may be charged at source on interest income at 10 percent, with an exemption where the recipient is a financial institution or public authority afforded such treatment under the agreement.

A construction permanent establishment will be deemed to have been created where projects or activities last more than nine months, rather than "more than six months in a calendar year or more than six consecutive months overlapping two calendar years" in the existing pact.

Further, a services PE will be established where services are performed for more than 183 days in a 12-month period.

The agreement includes provisions intended to counter tax base erosion and profit shifting. It includes a preamble that states that the DTA is not intended to create opportunities for non-taxation or reduced taxation through tax evasion or avoidance, or treaty shopping.

Further, the agreement includes provisions to counter treaty abuse, prevent the artificial avoidance of permanent establishment status, neutralize the effects of hybrid mismatch arrangements, and improve dispute resolution mechanisms.